NCUA Completes Final Securitization Transaction of 2010

The NCUA completed its fourth and final guaranteed note transaction of 2010 on Friday and the securitizations have had proceeds of $17.75 billion.

The most recent transaction was a Guaranteed Note student loan-based offering that yielded $1.16 billion. It will pay 35 basis points over LIBOR.

The notes are funded by cash flows from corporate credit unions' legacy assets.

The notes are backed by an unconditional NCUA guaranty for timely payment of principal and interest. Credit unions can record their investment in the notes with a 0% risk weight.

The agency has completed 60% of the securitization, aimed at funding deposits assumed by the bridge corporate credit unions. It plans to resume offerings during the first quarter of next year.

"NCUA's ongoing efforts to resolve the corporate situation have yielded very positive results. The financial success of the securitization is not only enabling NCUA to manage the disposition of troubled corporate credit unions, it is also allowing the credit union industry to pay for the losses without diminishing service to consumers," NCUA Chairman Debbie Matz said in a statement.